On the ballot: Will Californians vote to build an off-ramp from the oil highway?

Californians will find more than a dozen initiatives
on their ballot this Nov. 7, including one aimed at helping them
kick the oil habit. Proposition 87 would raise $4 billion over 10
years for the California Energy Alternatives Program Authority by
taxing oil produced in the state. Part of an effort to reduce oil
consumption by 25 percent over the next 10 years, the tax would
fund the development of alternative fuels, such as ethanol and
renewable energy, and provide incentives for consumers to use them.

California leads the nation in oil use and produces about
37 percent of what it uses. The state is third behind Texas and
Alaska in oil production, accounting for about 12 percent of U.S.
production.

"Right now, Californians only have one choice
to fuel their vehicles," says Yusef Robb, a spokesman for the Yes
on 87 campaign. "Prop. 87 will bring choices to the market. Choice
lowers prices. And these choices are cleaner, they’re
cheaper, and they’re made right here at home in the U.S."
Opponents of Proposition 87 — primarily Chevron and an
ExxonMobil/Shell partnership called Aera Energy — have poured
more than $53 million into fighting it. Although the measure
prohibits oil companies from passing the tax on to consumers,
opponents say that if it passes, Californians will pay more at the
pump.

Al Lundeen, a spokesman for No on 87, says that by
making oil production in California more expensive, Proposition 87
will force producers to import more oil from outside the state.
Foreign oil can cost more to refine, says Lundeen, and shipping it
adds expense as well. "Those are the kinds of costs," he says,
"that lawfully get passed through at the gas pump." Proposition 87,
he adds, is "going to make us more reliant on foreign oil, and that
puts us in a more vulnerable situation."

But others say
87 is designed to do the opposite: to help California break free of
reliance on oil, wherever it’s produced. With global demand
— mostly from China and India — increasing
dramatically, alternative fuels offer an escape from the pinch of
increasing competition for oil. "The ability of the petroleum
industry to come up with new supplies is not keeping pace with
demand," says John Shears, the research coordinator for the Center
for Energy Efficiency and Renewable Technologies in Sacramento.

Proposition 87’s supporters are serious about
bringing more competition to the market. The biggest underwriter of
the Yes on 87 campaign, by far, is Hollywood producer Stephen Bing,
who has contributed some $40 million. But $2 million has also come
from venture capitalists Vinod Khosla and John Doerr. Khosla is
heavily invested in a company called Cilion, which plans to build
three ethanol plants in California by 2008, and he and Doerr have
invested in another ethanol-refining company called Altra.

Shears says that in the absence of any meaningful federal
initiative to increase fuel economy, develop alternative fuels, or
address global warming, it’s up to states to take the lead.
And, he says, Proposition 87 "can work synergistically" with other
new California laws, such as the recently passed Global Warming
Solutions Act, which requires the state to reduce its greenhouse
gas emissions 25 percent by 2020. "Not any one single pathway is
going to help us deal with the climate issues," he says. "The state
has to look at all of the different pathways that are available to
it."